Secure Funding Pty Limited v Coughlin

Secure Funding Pty Limited v Coughlin - [2009] NSWSC 384 - NSWSC 2009 case summary — Zoe

[23]

2 The land in question was owned by Heidi and Chad Coughlin's father, Steven James Coughlin. Mr Coughlin had himself filed a motion in the proceedings seeking similar orders, default judgment having earlier been given and a writ for possession issued in favour of the plaintiff in August 2008. 3 Mr Coughlin's motion was being heard by Hoeben J, when Mr Coughlin was made a bankrupt on 6 April 2009, the hearing having earlier been adjourned in order to permit Mr Coughlin to put on further evidence in support of his application. After consideration, Mr Coughlin's trustee elected not to proceed with the motion and on 30 April 2009, the motion was dismissed. On 5 May, the Sheriff served notices that the writ would be enforced on 12 May. On the afternoon of 8 May, the motion brought on behalf of Heidi and Chad Coughlin was filed and the enforcement of the default judgment and writ of possession was stayed, with the motion listed for hearing on 11 May. 4 That motion was supported by an affidavit of Ms Yu of 7 May 2009. She was also called to give evidence. Her evidence was that Heidi and Chad Coughlin were children who resided at the property with their father, who had custody of them. While the plaintiff complained that the evidence was insufficient to establish their residence, I am satisfied that in the circumstances there is no reason for Mr Yu's evidence to be rejected. 5 There was also an issue between the parties as to whether the children were occupiers of the property and whether they had ever been served with a notice to the occupier, as the Uniform Civil Procedure Rules 2005 required. There was no question that they had been served with a Notice to Vacate, dated 5 May 2009. 6 The initial question to be determined was Heidi and Chad Coughlin's standing to bring the motion and to be joined as defendants in the proceedings. Their motion sought to raise two matters. Firstly, the failure to serve upon them the notice required by Rule 6.8 of the Rules and secondly, that the plaintiff had failed to comply with the provisions of the Farm Debt Mediation Act 1994, which applied to their father's mortgage, with the result that these enforcement proceedings were void. While accepting that they were not parties to the mortgage, and themselves having no rights under the Farm Debt Mediation Act, their case was that as occupiers and residents of the property, they had a sufficient interest to be joined as defendants in the proceedings in order to make applications under ss 65 and 75 of the Supreme Court Act 1970.

[27]

The critical question is whether at the relevant time Mr Munnoch Jnr was an occupier of the subject premises within the meaning of the abovementioned rules, in that on the date on which proceedings for possession of the land were commenced he was in occupation of any part of that land. Mr Jacobson of counsel, who appeared for the bank, submitted that "occupier" in this context means a person with some contractual right to possession. At the same time he fairly conceded that it was not easy to give an exhaustive definition of the word "occupier". Reference was made to The Queen v The Assessment Committee of St Pancras (1877) 2 QBD 581 at 588, where Lush J said, in relation to a rating statute: "It is not easy to give an accurate and exhaustive definition of the word 'occupier'. Occupation includes possession as its primary element, but it also includes something more. Legal possession does not of itself constitute an occupation. The owner of a vacant house is in possession, and may maintain trespass against anyone who invades it, but as long as he leaves it vacant he is not rateable for it as an occupier. If, however, he furnishes it, and keeps it ready for habitation whenever he pleases to go to it, he is an occupier, though he may well reside in it one day in a year." It was submitted by Mr Jacobson that Mr Munnoch Jnr had a bare licence from the owner or from Mr Munnoch Snr to reside in the premises and was not an occupier. Miss Merkel, who appeared for the owner, submitted that the precise meaning of the word "occupier" must depend on the purpose for which, and the context in which, it was used. Sometimes occupation denotes legal possession in the technical sense, sometimes mere physical presence : Pro-Campo Ltd v Commissioner of Land Tax (NSW) (1981) 81 ATC 4270 at 4276. Reference was also made to Stroud's Judicial Dictionary, 4th ed Vol 3 p 1812 et seq (and second supplement p 131), as illustrative of the various meanings of which may be attributed to the term "occupier", depending upon the context. She submitted that occupation may be shared with others and relied upon Strand Securities Ltd v Caswell [1965] 1 Ch 959 at 980, and the various cases there cited. She sought to distinguish the judgment in Hodgson v Marks [1970] 3 All ER 513, in particular a passage in the judgment of Ungoed-Thomas J at 523, where his Honour said in relation to the Land Registration Act 1925: "Actual occupation requires physical presence. It was suggested at one stage of the argument that the occupation had to be exclusive. But it has been established that 'actual occupation may be shared with others or had on behalf of others' (see Strand Securities Ltd v Caswell ). If occupation can be shared, then in the present case there was no advantage in maintaining that it nevertheless had to be exclusive; and this was not pressed. But it requires more than physical presence - a guest to dinner in not an occupier of the house or room in which he dines. Indeed the defendant submitted that mere personal residence does not constitute occupation; and I agree. The observations in the Strand Securities case, which were referred to, clearly do not in my view establish the contrary." It was further submitted that the purpose of Pt 7 r 8 is that the persons in occupation of land should have opportunity of being joined as defendants in proceedings of possession of land. The question whether the occupants have a defensible right against the person seeking possession is irrelevant. If the benefit of the rule were limited to persons who must in any case be joined as defendants, it would be superfluous. An effect of requiring that notice be given is to allow the opportunity for exercise by the occupants of legal or contractual rights against some third party, of which the person seeking possessio may to have notice. It was submitted in the ultimate that in the context of the relevant Supreme Court Rules occupation means no more than personal residence in the subject premises. Having set out the competing submissions, I shall now express my own views on the matter. The decisive aspect of this case, to my mind, is that Mr Munnoch Jnr was residing in these premises as part of a family unit, albeit that he was 21 years of age. Mr Munnoch Snr, the lessee, had granted his son and daughter permission to reside in the home, no doubt as a consequence of his sense of parental obligation. In the circumstances I classify Mr Munnoch Jnr as a resident or inhabitant of the premises. To my mind Mr Munnoch Snr is the occupier for the purposes of Pt 7 r 8 of the Supreme Court Rules. 11 In Kerr v Sheriff of New South Wales (1996) 9 BPR 16,215, it was observed at 16,216: The purpose of the "notification to occupier" is to make sure that it is received by the persons who have the right to defend their possession of the property, so that person can intervene in the proceedings. It is not intended that every person whose fate must depend on the fate of the tenant must receive a notice. 12 In Bankstown Airport Ltd v Noor Al Houda Islamic College Pty Ltd [2002] NSWSC 193, Young CJ in Eq said at [64] - [69]:

[42]

farm mortgage includes any interest in, or power over, any farm property securing obligations of the farmer whether as a debtor or guarantor, including any interest in, or power arising from, a hire purchase agreement relating to farm machinery, but does not include: (a) any stock mortgage or any crop or wool lien, or (b) the interest of the lessor of any farm machinery that is leased. 19 Mr Coughlin's pursuit of the relief he had sought in these proceedings in relation to the rights which he claimed he had under the Farm Debt Mediation Act, came to an end with his bankruptcy. Thereafter, the Act no longer applied to him (see s 5). Nevertheless, the trustee sought and was given the opportunity to consider whether to pursue Mr Coughlin's motion, Mr Coughlin's claim being that the Act applied at the time the plaintiff gave its notices, with the result that the failure to comply with the requirements of the Farm Debt Mediation Act made the enforcement action which the plaintiff was here pursuing void (see s 6). 20 The trustee ultimately decided not to pursue the motion and, as a result, it was dismissed. That did not determine the question of whether the Farm Debt Mediation Act applied to the mortgage, but it brought to an end the claim pursued by Mr Coughlin, leaving the plaintiff free to act on the judgment and the writ of possession it had earlier obtained. On 5 May, the Sheriff thus gave Heidi and Chad Coughlin notice of their eviction from the premises. 21 By this motion, Heidi and Chad Coughlin now seek to argue that when the plaintiff gave the notices on which the default judgment was obtained, the plaintiff was bound to deal with their father in accordance with the requirements of the Farm Debt Mediation Act, with the result that that these enforcement proceedings are void, the plaintiff not having complied with s 8 of that Act. There was no issue that the plaintiff had not done so, it taking the view that the legislation did not apply to the mortgage. The plaintiff challenged Heidi and Chad Coughlin's standing to bring their motion, they not having the right to be joined as defendants to the proceedings, not being occupiers of the property and having no other interest in the property.

[43]

22 There was no issue that as the result of the bankruptcy, the Farm Debt Mediation Act no longer applies to Mr Coughlin. The practical position between the parties was thus that even if the Farm Debt Mediation Act applied at the time the plaintiff gave the notices upon which it relied when obtaining default judgment, that legislation no longer applies and even if Heidi and Chad Coughlin have standing to bring these proceedings and succeed in the argument that they wish to advance, the plaintiff is now free to pursue its rights under the mortgage, without giving any notices under the Farm Debt Mediation Act. It follows that, in the short term, eviction might thus be averted if standing is established and the argument succeeds otherwise, but the plaintiff is undoubtedly free to pursue its rights, given Mr Coughlin's default under the mortgage. The plaintiff will be able to obtain possession, by issuing fresh notices. 23 Heidi and Chad Coughlin's application thus has to be considered in light of the approach of the High Court, that a declaration will generally not be granted, where there is not sufficient practical utility in resolving a dispute (see Neeta (Epping) Pty Ltd v Phillps [1974] 131 CLR 286) and where the applicant has no substantive interest in the matter to be decided (see Johnco Nominees Pty Ltd v Albury Wodonga (NSW) Corp [1977] 1 NSWLR 43. While the power is an extremely broad one, as was observed in Forster v Jododex Australia Pty Ltd and Another (1972) 127 CLR 421 at 435, the power is ordinarily exercised 'where it is a question of defining the rights of two parties'. Here, neither Heidi nor Chad Coughlin themselves claim to have any relevant rights under the mortgage or legislation in question. It follows that they have no substantive interest in the matter which they seek to have the Court decide, namely the application of the Farm Debt Mediation Act at the time notice was given in 2007. Nor do they have any substantive interest in the mortgage upon which the default judgment and writ of possession which they seek to have set aside rest. 24 Nevertheless, the application to set aside the default judgement was also pressed under s 65 of the Supreme Court Act. While at one point it was argued that even a stranger would have standing to challenge the plaintiff's alleged failure to adhere to the obligations imposed by the Farm Debt Mediation Act, on the authorities it is clear that in order to establish standing under that section, it has to be shown that the plaintiff had a 'duty' under the Farm Debt Mediation Act, in respect of which Heidi and Chad Coughlin have an interest, beyond that of any other member of the public. In Day v Pinglen Proprietary Limited and Others (1981) 148 CLR 289, this was explained at 299 and 300, on this basis:

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25 In Day, what arose for consideration was Section 315 of the Local Government Act 1919, which provided that a building approval given by a municipal council would be void if the building work to which it referred was not substantially commenced within twelve months after the date of approval. An adjoining owner, who claimed that the project would adversely affect the view of the harbour from her property, applied for a declaration that the approval had become void and an injunction restraining the owner of the building site and the builder it had engaged for the work from constructing the building, without a valid consent from the council. It was found that the plaintiff had standing to maintain the proceedings, firstly, because the existence of an impending detriment threatened by an unlawful act was sufficient to confer standing to seek an injunction to restrain that act and, secondly, because the existence of a right in the plaintiff to have objected to the grant of approval to the development identified her as a member of a category of persons who were potentially affected by it. 26 In this case, the question of Heidi and Chad Coughlin's personal interest in whether or not the notices given by the plaintiff to their father in 2007 were void, may be accepted, it seems to me, given that they reside with their father at the property and will be evicted, if the plaintiff enforces the writ of possession against them. If the Farm Debt Mediation Act applied to the mortgage here in question, then the plaintiff's pursuit of these enforcement proceedings is void. The detriment which Heidi and Chad Coughlin seek to avoid is eviction as the result of enforcement proceedings which they claim are void. That, it seems to me, establishes an impending detriment, sufficient to give them an interest in the matters which they seek to raise, beyond that of other members of the public. 27 Whether or not the Farm Debt Mediation Act establishes any 'duty', which might be the subject of an order under s 65, must thus also be considered. The 'duty' was argued to be the duty to give the notice required by s 8 of the Farm Debt Mediation Act. Whether or not s 65 of the Supreme Court Act is concerned with 'duties' which are not public or quasi public, has not been much considered. (See the commentary at SCA s 65.5 Vol 2 Ritchie's Uniform Civil Procedure 15,471-2). Clearly any 'duty' to give a notice under s 8 of the Farm Debt Mediation Act, is not a duty of a public or quasi public kind. Section 8 provides: 8 No enforcement action until notice of availability of mediation given (1) A creditor to whom money under a farm mortgage is owed by a farmer must not take enforcement action against the farmer in respect of the farm mortgage until at least 21 days have elapsed after the creditor has given a notice to the farmer under this section. (2) Notice to the farmer is to be in writing in a form approved by the Authority (informing the farmer of the creditor's intention to take enforcement action in respect of the farm mortgage and of the availability of mediation under this Act in respect of farm debts). (3) This section does not apply if a certificate is in force under section 11 in respect of the farm mortgage concerned.

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28 The statutory regime however, not only precludes a creditor to whom a farm mortgage is owed from taking enforcement proceedings, unless the statutory notice is given, that notice also triggers a mediation regime, if requested by the farmer within a specified period. Enforcement proceedings taken inconsistently with the statutory regime are void (s 6); any agreement by which parties seek to contract out of the Act is void and gives rise to an offence (s 20); and any waiver of any mediation rights under the Act is also void (s 21). 29 The word 'duty' is not defined in the Supreme Court Act. Section 65 apparently has its origins in the Common Law Procedure Act 1899, where the specific reference to relief by way of mandamus, confined the duties in question to those of a public or quasi public nature. (See the commentary at SCA s 65.5 Vol 2 Ritchie's Uniform Civil Procedure 15,471.) Section 65 is not expressly so confined and its construction must be approached in the context of the Act as a whole, which requires that consideration be given to the separate provisions made in s 69, in relation to the Court's jurisdiction to grant relief in cases where the Court formerly had power to grant relief by way of writ. 30 As recently observed by the Chief Justice in Caterpillar of Australia Pty Ltd v Industrial Court of New South Wales [2009] NSWCA 83: 86 It is now well established that the contemporary approach to statutory interpretation requires a court to have regard to the context in which words appear in the first instance and not merely after some ambiguity has been identified. (See eg CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 405; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]; Network Ten Pty Ltd v TCN Channel Nine Pty Ltd [2004] HCA 14; (2004) 218 CLR 273 at [11].) 87 As Justice Learned Hand once put it (Helvering v Gregory (1934) 69 F 2d. 809 at 810-811): "The meaning of a sentence may be more than that of the separate words, as a melody is more than the notes, and no degree of particularity can ever obviate recourse to the setting in which all appear, and which all collectively create". 88 Judges no longer approach a statute with scissors in one hand and a dictionary in the other

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31 I am satisfied that the word 'duty', where used in s 65 of the Supreme Court Act ought not to be given any confined meaning. As Dixon J observed in Cody v JH Nelson Pty Ltd (1947) 74 CLR 629 at 647, 'words although general should be understood in their primary and natural signification unless there are sufficient indications of some other meaning'. There are in the Supreme Court Act no such indications. 32 In its ordinary meaning, the word 'duty' is clearly wide enough to encompass a statutory obligation of the kind imposed by s 8 of the Farm Debt Mediation Act, encompassing as it does the meaning 'that which one is bound to do by moral or legal obligation' (see the Macquarie Dictionary Online). In the Encyclopaedic Australian Legal Dictionary, the word is similarly defined as 'a legal obligation by one person to another. A duty may require the performance of certain actions, or the refraining from certain actions.' 33 While it is always a matter for a creditor to determine whether or not to enforce a debt, once s 8 of the Farm Debt Mediation Act is attracted to a mortgage, it requires both that the creditor take certain action - the giving of a statutory notice - and that the creditor refrains from certain action - the enforcement of the debt, until 21 days have elapsed from the giving of the notice. 34 In Cameron North Sydney Investments Pty Ltd v The Owners Strata Plan No 50411 and Ors [2002] NSWSC 726, Young CJ in Equity appears to have come to a similar view. There at issue was whether the Court could order the first defendant to consent to the plaintiff lodging a development application with the North Sydney Council. His Honour observed: 18 I must confess that I am a little in the dark as to just what power the Court is exercising when it does what Waddell CJ in Eq did, but it seems to me probable the seat of power is s 65 of the Supreme Court Act 1970 which provides that the Court may order any person to fulfil any duty in fulfilment of which the person seeking the order is personally interested. The prime thrust of duty under previous versions of s 65 was confined to duties of a public or quasi-public nature (see eg Benson v Paull (1856) 6 E & B 273; 119 ER 865). However, I agree with the remarks of the learned editor of the Supreme Court Practice on s 65, that the present section is not so confined and confers a power which is exercisable, even where the duty in question is not able to be described as public or quasi-public.

[51]

The question is whether they have standing to bring the action. If an attempt were made to frame an ideal law governing the standing of a private person to sue for such a purpose, it would be necessary to give weight to conflicting considerations. On the one hand it may be thought that in a community which professes to live by the rule of law the courts should be open to anyone who genuinely seeks to prevent the law from being ignored or violated. On the other hand, if standing is accorded to any citizen to sue to prevent breaches of the law by another, there exists the possibility, not only that the processes of the law will be abused by busybodies and cranks and persons actuated by malice, but also that persons or groups who feel strongly enough about an issue will be prepared to put some other citizen, with whom they have had no relationship, and whose actions have not affected them except by causing them intellectual or emotional concern, to very great cost and inconvenience in defending the legality of his actions. Moreover, ideal rules as to standing would not fail to take account of the fact that it is desirable, in an adversary system, that the courts should decide only a real controversy between parties each of whom has a direct stake in the outcome of the proceedings. The principle which has been settled by the courts does attempt a reconciliation between these considerations. That principle was recently stated in Australian Conservation Foundation Inc. v. The Commonwealth [(1980) 146 C.L.R. 493]. A plaintiff has no standing to bring an action to prevent the violation of a public right if he has no interest in the subject matter beyond that of any other member of the public; if no private right of his is interfered with he has standing to sue only if he has a special interest in the subject matter of the action (1980) 146 C.L.R., at pp. 530-531, 537, 547-548]. The rule is obviously a flexible one since, as was pointed out in that case, the question what is a sufficient interest will vary according to the nature of the subject matter of the litigation.

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